Finance Videos

Breakingviews: Glengarry M&A leads

Nov. 8 - If shares of acquirers keep rising, why can't bankers persuade more CEOs and boards to do deals? Jeffrey Goldfarb and Robert Cyran discuss why coffee is for closers.

TRANSCRIPT +

But relatively small deal. Got us thinking about a much bigger issues Felix pharmaceuticals is buying rival for two point six billion dollars. And it shares went up something like 6166 X 10% and see a trend we've seen over and over again so the question really is. Why. Are -- bankers not. Persuading people to do more people outlets -- let's that the -- normally deals. Allied heels don't work out I mean some of the academic lectures since most actually just right now. That's why it's like almost that it. Typical thing that 800 deal comes out. They acquire stock dropped the never stopped anyone before Viagra but nevertheless we are -- look at -- today it doesn't have the details rate the stock to -- -- that's wonderful exactly the this year we've seen deal after deal after deal the acquire stock goes up. And that's just a little we -- not a little like like for instance earlier this month there is and a pharmaceuticals they were. They button of the company and basically the pick up the purchase price for free because they're -- stock went up that same values the company at spot and I happened with -- neck and below -- it also and that's which was the buyer. Their stock and it went up more than even the premium they were decades. Four of its operating company for for basically right. -- -- the and then there a couple of reasons I'm first up it seems that because they're so few deals being done it seems like any really has recovered. The deals that are being one that make a lot of sense you know at that you know -- that some of these -- have really good tax. Fifty in a -- are dodging it there for the end of Andover deal for instance. And America can be (%expletive) company and they re incorporating tire company in Ireland Canada cut their tax bill me by as much as two thirds yes exactly so that's a lot of money. Obviously I mean we've heard for years now about the -- conditions that are out there for him today casts on balance sheets cheap credit all these things. But now if he makes you now you have these deals don't put on a PowerPoint presentation in front of aborted your banker yeah but he kind of makes -- -- where -- the sales excellent. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But it's it's it's probably think that also just it takes time you know I -- sports -- -- and at least not call -- stupid. Comments that -- going to be looking at these deals and saying hold on -- we can do that and of course he can just a regular night takes several months -- overcoming I think also some other macro conditions -- -- people from worried about the United States the government that you are deserted or -- huge deal the government -- -- -- -- that you have -- -- default next week obviously you -- kind of reading your risk exposure. But it we've seen again that they risk. People getting warmer a couple of brits can look at all the IQ is being done it's your twitters just won a lot of them being done. So obviously people are are a couple wanting more risky thing that sport again something -- and so that's true I think there's more risk that a lot of these deals that are really getting the big -- for the buyers. All are not the transformational deals there are the kind of the smarter sensible. That the -- vertical rather than horizontal. Right I mean that's exactly where -- senators aren't yet we'll see markets actually taking negative view deals -- come protection starting -- -- -- -- but I probably a lot more sensible wants to be done in the short term I would make that the -- back to me because there. Effective powdered it got a little bit better anyway we will leave it there will be back for more breaking news next week.

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